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Updated Research Report on AK Steel - Analyst Blog

On Mar 18, we issued an updated research report on steel maker
AK Steel Holding Corporation
(
AKS
). The company should benefit from strong momentum in the
automotive market and lower steelmaking input costs in 2014.

AK Steel posted healthy fourth-quarter 2013 results on Jan 28.
The company swung to a profit in the quarter on the back of a tax
benefit. Adjusted earnings topped the Zacks Consensus Estimate.
Sales rose on higher shipments and beat expectations.

AK Steel, a Zacks Rank #1 (Strong Buy) stock, is expected to
benefit from strength in the automotive market and higher
shipment of steel products to automakers. Automotive contribution
to the company's revenues was 51% in 2013, higher than 45%
achieved a year ago.

AK Steel is expected to continue to gain automotive market share,
driven by continued healthy demand for its carbon and specialty
steel products. The company expects higher shipment of carbon and
stainless steel products to the automotive market in 2014.

AK Steel is also investing to procure about half of its iron ore
and coal requirements internally. It is making good progress with
its first coal mine at AK Coal and is ramping up mining volumes.
AK Steel is also making significant progress with its iron ore
pellet project at Magnetation. Both these strategic investments
are expected to improve the company's cost structure and
strengthen its position in the years ahead.

Moreover, AK Steel should benefit from favorable pricing trend
for key raw materials. The company expects to gain from lower
input costs, mainly coal and coke, in 2014. Declining prices for
these inputs should work in its favor.

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